Fourth Quarter FY 2019 Quarterly Update

Fourth Quarter FY 2019

Quarterly Update

Infineon Technologies AG

Investor Relations

Agenda

Infineon at a glance

Planned acquisition of Cypress

Quarterly highlights

Automotive

Industrial Power Control

Power Management & Multimarket

Digital Security Solutions

Selected financial figures

1

2

3

4

5

6

7

8

22019-11-12 Copyright © Infineon Technologies AG 2019. All rights reserved.

ATV IPC PMM DSS

Power embedded control RF & Sensors


Automotive Power Security ICs

897 982 1,208 1,353 1,319

5,7956,473

7,0637,599 8,029

15.5% 15.2%17.1% 17.8% 16.4%

0

3000

6000

9000

FY15 FY16 FY17 FY18 FY19

Revenue Segment Result Margin

[EUR m]

44%

8%

18%

30%

Automotive

(ATV)

Industrial Power

Control (IPC)

Digital Security

Solutions (DSS)

Power Manage-

ment & Multi-

market (PMM)

[EUR m]3,503

1,418

2,445

642

Revenue in FY19:

€8,029m incl. OOS

and C&E of €21mFinancials Market Position

FY19 revenues by segment FY19 revenues by product category

# 2 # 1 # 2

Strategy Analytics,

April 2019

Informa Tech,

September 2019

ABI Research,

September 2019


Infineon is a long-standing member of Europe's

leading sustainability indices

› Feb 2019: Infineon is listed in

the Sustainability Yearbook

for the 9th consecutive year

Infineon's most recent achievements

› Jul 2018: Infineon was added to the FTSE4Good Index Series in 2001 and has been

confirmed as a member since then

› Since 2014, Infineon has been publishing information on opportunities and risks due to

climate change through the "Carbon Disclosure Project" (CDP)

› Mar 2019: Infineon has been reconfirmed as a constituent of the Ethibel Sustainability Index

(ESI) Excellence Europe

› Mar 2019: Infineon has been reconfirmed for inclusion in the Ethibel EXCELLENCE

Investment Register

› Sep 2019: Infineon is listed in

the DJS Index for the 10th

consecutive year

› Feb 2019: Infineon received a rating of “AA” (on a scale of “AAA” – “CCC”) in the MSCI ESG Ratings

assessment

› Mar 2019: Sustainalytics

rated Infineon as an Out-

performer in its ESG rating,

with an overall score of 76


Our strategy is targeted at value creation through

sustainable organic growth

Target operating model: average-cycle targets

Revenue growth

9%

Segment Result margin

17%+

Investment-to-sales

15%

System leader

in automotive

#1; system and

technology leader

Broad RF and sensor

technology portfolio#2 in Security Solutions

Auto Power RF & Sensors Security

› Focus on fastest growing

segments of semi market

› Tackle global megatrends

› Leverage core competencies

in different end markets to

maximize ROI

› Create value for customers

through system under-

standing

Focus Technology leadership System understanding

› Organic RoCE ≙ ~2x WACC› Paying out at least a constant dividend

even in periods of slower growth

› continuous EPS

increase

Continued value creation for shareholders


Well diversified exposure to end-markets and

applications provide resilient growth model

FY19 revenue of €8,029m by target application

powertrain excl. xEV (12%)

xEV 7%

safety excl. ADAS (8%)

ADAS 3%

comfort, premium (12%)

other ATV (2%)

drives (6%)

renewables (3%)

home appliances (3%)

traction (2%)

other IPC (4%)

computing (8%)

consumer (2%)

smartphones, wearables (5%)

communications (1%)

industrial (11%)

other PMM (3%)

smart card solutions (5%)

embedded security solutions (3%)

ATV

44%

IPC

18%

PMM

30%

DSS

8%


Tight customer relationships, based on system know-

how and application understanding

ATV IPC DSSPMM

Distribution partnersEMS partners


Infineon gained market share in all target markets

Source: Based on or includes content supplied by

Informa Tech (former IHS Markit

Technology), "Power Semiconductor Market

Share Database – 2018", September 2019

Source: ABI Research, "Smart card & secure ICs",

September 2019

Source: Strategy Analytics, "2018 Automotive

Semiconductor Vendor Share",

April 2019

Automotive

semiconductors

total market in 2018: $37.7bn

2.6%

2.6%

2.8%

4.9%

5.4%

7.6%

8.2%

8.9%

11.2%

12.0%

Toshiba

ADI

Rohm

ON Semi

Bosch

STMicro

TI

Renesas

Infineon

NXP

Security ICs


8.5%

10.1%

17.4%

24.3%

24.8%

CEC Huada

STMicro

Samsung

Infineon

NXP

Power discretes

and modules


2.5%

2.6%

3.3%

3.6%

4.5%

4.5%

4.8%

5.4%

8.9%

19.9%

Semikron

Rohm

Renesas

Fuji

Toshiba

Vishay

Mitsubishi

STMicro

ON Semi

Infineon (+1.2-pt)

(+0.4-pt)

(+0.1-pt)


Outlook for Q1 FY20 and FY20

Segment

Result

Margin

Revenue

At the mid-point of the

revenue guidance:

~13%

Decline of 7%

+/- 2%-points

Investments in FY20 ~€1.3bn**

D&A in FY20 ~€1bn***

Outlook FY20*

* Based on an assumed average exchange rate of $1.13 for €1.00

** Includes ~€400m for cleanroom, office buildings and structural changes

*** Including D&A on tangible and intangible assets from purchase price allocation of about €60m

increase of 5%

+/- 2%-points

At the mid-point of the

revenue guidance:

~16%

Outlook Q1 FY20*(compared to Q4 FY19)


Agenda




Automotive





1

2

3

4

5

6

7

8


The deal shapes a portfolio that perfectly links the

real and the digital world

Digitalworld

Automotive

Power

supplies

Battery-powered

devices

Consumer

IoT

Industrial

IoT

5G

Connectivity

SENSE = Sensors

COMPUTE = Microcontrollers

ACTUATE = Power Semis

CONNECTIVITY = WiFi, BT, BLE, USB/USB-C

Software

Ecosystem

Drives

Infineon Cypress

Legend


Infineon and Cypress can together offer full system

solutions

Outdoor Unit

Fan +

Com

pre

ssor

PF

C

Indoor Unit

User

Inte

rface

MCU

HMI

IPM

IPM

Gate

Driver

IGBT /

MOSFET

MCU

Dual Motor + PFC

Connectivity

WIFI /

Bluetooth

Frontend

MCU

Connect

Security

(Trust)

Supply (ACDC)

UART

Touch / Button

LED / LCD

Audio Out

Infineon Cypress

Legend

Ind

oo

r Fa

n

Co

ntro

l

IPM

Main

Contr

ol

Gate

DriverMOSFET

MCU

Main

Control

Sensor

RadarProximity

Heater

Motor Louver

Air Quality

UARTMCU

FAN

› Ease of design -> combined

portfolio covers all relevant

system components

› Superior quality -> integrated

solution ensures MCU, power

stage and peripherals work

perfectly together

› Faster time-to-market -> no

addl. integration or software

dev. costs

Example: air-conditioning

What makes system solution

attractive to customers?


Infineon and Cypress portfolios complement each

other covering entire range of auto applications

Body Cluster/

InfotainmentChassis Powertrain ADAS

MCU

Sensors

compute power / application complexityLow High

Application examples

Infineon Cypress

Legend

NOR Flash

Connectivity

Creating the #1

auto semi vendor

Complementary MCU

portfolio results in:

› broader customer access

› cross-selling opportunities

Portfolio expansion

through:

› connectivity

(WiFi, Bluetooth, USB-C)

› external NOR flash for

processors in cars

NOR Flash

Power

Sensors Sensors

Power

MCU (AURIX™)

› HVAC

› door control

› hybrid cluster

› WiFi

› touch control

› USB-C

› braking

› steering

› domain

› engine

› transmission

› inverter

› radar

› sensor fusion

Full coverage of all application fields within automotive Benefits of combination


Further improvement of through-cycle

Target Operating Model

Current(as announcedat CMD 2018)

Integratedcompany*

Revenue growth 9% 9%+

Segment result margin 17%+ 19%

Investment-to-sales 15% 13%

* Infineon financial performance to approach new targets as integration progresses


Financing: Major steps already accomplished

STEP 1

STEP 2

STEP 3

STEP 4

NEXT

Underwriting of full acquisition amount by 3 banks

Confirmation of investment grade rating by Standard & Poor's

Equity de-risking: Raise of €1.5bn via ABB

Successful syndication of acquisition facility to 20 national and

international banks

STEP 5

› Refinancing of remaining bridge and term loan through capital

markets

› Deleveraging: return to target level ≤ 2x gross debt / EBITDA in

2023

Successful launch of €1.2bn dual-tranche hybrid bond


Agenda




Automotive





1

2

3

4

5

6

7

8


Infineon and Nichia to build high-definition micro-LED

matrix solution for adaptive driving beams

Nichia and Infineon develop a

high-definition (HD) light engine

› 16K µLEDs for front light

applications

› resolution ~180x as high as

that of comparable solutions

› HD light to the entire field

of view

› new driver IC control and

diagnose all 16K µLEDs

individually

› significantly higher energy

efficiency

Nichia µ-PLS*

glare-free high beam

Nichia

µLED

Infineon

control IC

Nichia µ-PLS*

project markings on the road

Examples of applications

* micro pixelated light source


AURIX™ 2G selected by North American tier-1 for ADAS/AD multi-functional platform

Key applications of ADAS/AD multi-functional platform

powered by AURIX™ 2G

sensor fusion

domain controllerfront camera

system

gateway systemdriver monitoring

system

body control module

OEM’s from major regions

awarding this platform


Infineon’s SiC business so far dominated by

industrial; design-in momentum clearly on automotive

Cumulated SiC design-ins of ~€1.8bn*

Strong growth in SiC business; very

balanced product and customer portfolio

FY17 FY18 FY19 FY20e

automotive

industrial

* as per end of FY19; ** only customers with > €10k revenue considered

CAGR(FY17-FY20): ~50%

› > 125 different CoolSiC™ products in FY19

› ~ 90 different customers** in FY19

› ~ triple-digit €m revenue expected for FY20

› automotive: diodes, MOSFETs, MOSFET modules

› industrial (IPC): diodes, MOSFETs, hybrid modules,

MOSFET modules

› industrial (PMM): diodes, MOSFETs

60% – 80%

[EUR m]


Smartphone Google Pixel 4 first mobile device to

integrate Infineon XENSIV™ 60 GHz radar IC

The XENSIV™ 60 GHz radar IC can track sub-millimeter motions enabling:

› gesture sensing

› tiniest motions

› sensing the presence and

movement of people and

objects with high precision

› measuring distances and

speeds

› detection of a heartbeat from

several meters away

› further possible applications:

– any kind of mobile devices

– smart wearables

– smart stationary devices

Complete radar system with antennas on a very

small area and very low power consumption


Automotive

Infineon's position in the automotive semiconductor

universe

Market share trend: Infineon

benefits disproportionately

from the two mega trends

› electro-mobility: power, drivers, µC

› automated driving: radar, µC

Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2019

Sensors

7.6%

8.0%

8.3%

13.4%

16.4%

ON Semi

NXP

Melexis

Infineon

Bosch

Microcontrollers Power

6.3%

9.1%

9.9%

28.0%

28.0%

Microchip

Infineon

TI

Renesas

NXP

5.4%

8.2%

9.2%

13.2%

26.2%

ON Semi

TI

Bosch

ST

Infineon

12.0%

11.2%

8.9%

8.2%

7.6%

NXP

Infineon

Renesas

TI

ST

Automotive semiconductors total market in 2018: $37.7bn

› ADAS/AD

› Powertrain

› 24 / 77 GHz radar

› comfort

› safety

› xEV penetration

› EPS

› Lighting, comfort

long-term

drivers:

+0.4%-pt

+0.6%-pt

+0.5%-pt

+0.2%-pt

long-term

drivers:

long-term

drivers:


Electro-mobility


xEV growth driven by EU emission regulation;

CO2 reduction of 37.5% by 2030 vs 2021

CO2 emission development and regulations for main regions

* Japan has already met its 2020 statutory target as of 2013

Source: ICCT (www.theicct.org), August 2019

0

50

100

150

200

2010 2015 20202021 2025 2030

US Japan China EU

Japan 2020:

122 g CO2/km*

EU 2021:

95 g CO2/km

China 2020 :

117 g CO2/km

US 2020:

125 g CO2/km

actual

enacted

proposed

EU 2025:

81 g CO2/km

EU 2030:

59 g CO2/km

CO

2e

mis

sio

n v

alu

es [g/k

m],

no

rma

lize

d to

NE

DC

CO2 reduction of 37.5% will drive BEV/PHEV

share towards ~40% of all cars sold in EU in 2030!

-37.5%-15%

No CO2 reduction since 2016!

Necessity for significant improvements

increases continuously!


http://www.theicct.org/

$1 $2 $3 $4 $5 $6 $71 2 3 4 5 6 71 2 3 4 5 6 7

The incremental demand of power semiconductors is

a significant opportunity

2019 average xEV semiconductor content by degree of electrification

Source: Infineon; IHS Markit, Automotive Group, “Alternative propulsion forecast”, September 2019; Strategy Analytics, "Automotive Semiconductor Content", August 2019.

* Non PT (non powertrain): average semiconductor content in Body, Chassis, Safety & Infotainment application segments.

** "power" includes linear and ASIC; "others" include opto, small signal discrete, memory

48 V / MHEV FHEV / PHEV BEV

2018 0.3m vehicles 2.9m vehicles 1.7m vehicles




Non P

T*

ICE

PT

xE

VP

ow

er*

*

tota

l

sem

iB

oM

xE

Voth

ers

**

xE

VS

ensors

xE

Vµ

C

$355

$62 $5$19

$90 $0 $531

Non P

T*

ICE

PT

xE

VP

ow

er*

*

tota

l

sem

iB

oM

xE

Voth

ers

**

xE

VS

ensors

xE

Vµ

C

$355

$62 $14$19

$305$29 $785

Non P

T*

ICE

PT

xE

VP

ow

er*

*

tota

l

sem

iB

oM

xE

Voth

ers

**

xE

VS

ensors

xE

Vµ

C

$355 $0 $14 $19

$350$37 $775


Automated Driving


Vision Zero – AD requires failure-tolerant availability of the

system in the environment, “better than a human”

Sense Interpret & decide Act

Drive

rA

uto

ma

ted c

ar

Dependable Sensors Dependable Computing Dep. Actuators

Dependable Power (power supply and power distribution)

specialized

sensor

processor

driving

domain

controller

sensor

fusion

decision

making

central

gateway

Se

cu

re c

om

mu

nic

ati

on

Lidar

MicrophoneUltrasonic

Camera

inside

Camera

Radar

Braking

Engine

Matrix LED

Steering

Transmission

an

d a

uth

en

tica

tio

n

A failure-tolerant system with high availability relies on dependable key functionalities


Others› Ultrasonic

› Interior camera

› V2X

NCAP 5 Star, AD L2 AD L2+/L3 AD L4/L5

≥ 1

Increased sensor requirements drive the content in

the next five years and beyond

≥ 4 ≥ 8

≥ 3 ≥ 6 ≥ 10Radar

# of modules**

› Ultrasonic › Ultrasonic

› Interior camera

Automatic emergency brake/ forward collision warning

Application* Parking assist

Lane keep assist Highway assist

Valet parking

Highway and urban chauffeur

0 ≥ 1≤ 1

Camera

# of modules**

Lidar

# of modules**

New: Corner; starting 2020

Corner Imaging

SurroundCorner

MRR/LRR MRR/LRR

* Source: VDA (German Association of the Automotive Industry); Society of Automotive Engineers

** market assumption

More sensors required for any next level of automation


ADAS/AD semi growth driven by radar and camera

sensor modules over the next 5 years

Average semiconductor content per car by level of automation at the given years

Sense Interp. & dec. Act

Source: Strategy Analytics; Infineon.

BoM contains all type of semiconductors (e.g. radar modules include µC); sensor fusion does not include memory.

BoM are projected figures for the respective time frame.

radar

module

s

lidar

module

s

tota

l B

oM

L4/L

5 (

2030)

sensor

fusio

n

actu

ato

rs

cam

era

module

s

$195

$230

$190

$300

$180

tota

l B

oM

L3 (

2025)

$190 $560

$630

sensor

fusio

n

cam

era

module

s

radar

module

s

lidar

module

s

tota

l B

oM

L2 (

2020)

$40

$90 $0$30 $160

AD L4/L5

L4/L5 vehicles in 2030: ~4m

AD L3

L3 in 2025: ~1.5m

NCAP 5 Star/AD L2

L2 vehicles in 2020: ~6m

AD L2+

sensor

fusio

n

cam

era

module

s

radar

module

s

lidar

module

s

tota

l B

oM

L2+

(2025)

L2+ in 2022: ~1m

L2+ in 2025: ~2.5m

$0

$970

$190

$55

High

Low

Low

High

Low

High

Low

High

$250


Infineon's Power Strategy


Infineon's portfolio covers the entire range

of power and frequency

When turned on

current flows

When turned off

current is blocked

What is a power switch? How are power switches categorized?

What counts?

› Losses in on-state (R(DS)on)

› Heat dissipation

› Max. switching frequency

› Die size

› Package size (form factor)

IGBT Module

Discrete

IGBT MOSFET

100 W

1 kW

10 kW

1 Hz 1 kHz 1 MHz

power

100 kW

1 MW

10 MW

frequency

SiC

Module

SiC

MOSFET

GaN

MOSFET

=


Infineon's discrete power portfolio* is basically

separated by voltage classes

6,500 V

4,500 V

3,300 V

1,700 V

1,200 V

IPC

terr

itory

PM

M t

err

itory

discrete

IGBTs

IGBT

modules

SiC MOSFET today

SiC MOSFET

(CoolSiC™)

roadmap

GaN MOSFET today

GaN MOSFET

(CoolGaN™)

roadmap

900 V

600 V

400 V

150 V

100 V

80 V

40 V

20 V

high-voltage MOSFETs

(CoolMOS™)

mid-voltage MOSFETs

(OptiMOS™)

low-voltage MOSFETs

(OptiMOS™)

* excluding drivers and control ICs

MOSFETs

Silicon-based power switches Compound semiconductors

IGBTs(discrete, modules)

AT

Vte

rrito

ry

SiC roadmap


Three strategic levers to outgrow the power semi

market: "core – adjacent – new"

Controller switchGate driver

triggers low-power signal

translates

signal into

appropriate

gate input

Adjacent Core

application

e.g. motion

control, power

conversion

Strengthen core

› Complement leadership in today's

discrete power and module portfolio with

SiC and GaN

Grow in adjacent fields

› Invest into products for digital

control loop including algorithms for

drives

Broaden scope to new applications

› System understanding and strong R&D force allow us to enter emerging power

applications

New


Four key success factors: Infineon well positioned to

defend its leadership in power semis also in SiC

› multi-year SiC wafer

supply agreement

› acquisition of Siltectra

4.) System3.) Module1.) Substrate 2.) Device

› trench-based

architecture

› 150 mm conversion

completed

› expertise from

industrial heritage

› high-volume

manufacturing

› deep application and

system know-how

› Product-to-System

trenchplanar trenchplanar

Courtesy: Kaco and pv magazine

2008

100 kW

1129 kg

2011

50 kW

151 kg

2016

50 kW

70 kg

2018

125 kW

77 kg

n+

GateSource

n

Drain

n+

p+

Gp+

p

n+

GateSource

n

Drain

n+

p n+ p+p+ n+p

G


Clear leader in discrete IGBTs and IGBT modules;

IPMs strengthened maintaining #3

* Littelfuse acquired IXYS Corporation in January 2018. Both companies are reported separately in 2017 and combined as Littelfuse in 2018.

** Microchip Technology acquired Microsemi Corporation in May 2018. Both companies are reported separately in 2017 and combined as Microchip in 2018.

*** Including standard (non-integrated) IGBT modules and power integrated modules (PIMs) / converter inverter brake (CIB) modules.

Source: Based on or includes content supplied by Informa Tech (former IHS Markit Technology), "Power Semiconductor Market Share Database 2018", September 2019.

1.8%

2.1%

2.2%

2.4%

3.5%

4.9%

8.0%

9.7%

10.4%

34.5% (+1.7-pt)

ON Semi

Toshiba

Starpower

Danfoss

Hitachi

Vincotech

Semikron

Fuji Electric

Mitsubishi

Infineon

IGBT modules***


0.5%

0.6%

1.4%

2.1%

2.9%

5.8%

10.0%

12.0%

18.9%

32.3%

Jilin Sino-Micro

Microchip**

Rohm

STMicro

Sanken

Semikron

Fuji Electric

Infineon

ON Semi

Mitsubishi

IPMs


1.6%

3.1%

3.8%

4.8%

5.0%

5.4%

5.9%

9.5%

9.6%

37.4% (+ 0.7-pt)

Microchip**

Toshiba

MagnaChip

Renesas

Mitsubishi

STMicro

Littelfuse*

Fuji Electric

ON Semi

Infineon

Discrete IGBTs


(+1.6-pt)


Due to the extensive power module portfolio Infineon

can address the whole range of drives applications

Servo drives Low-power drives* Mid- and high-power drives

370 W 500 kW 500 kW 10 MW 370 W 75 kW

› high positioning accuracy

› fast response with no overshoot

› high reliability

› performance and reliability

› safety features

› good price/performance ratio

› safety

› durability

› high reliability and low downtimeRequirem

ents

*Low-power drives include compact drives, standard drives, premium drives and brushed DC drives.

› robotics

› material handling

› machine tools

› pumps and fans

› process automation

› cranes

› marine drives

› oil & gas industry

› chemical industry

(e.g. air compressors)

› cement mills

Key

applic

ations

› CIPOS™ IPM

› Easy 1B

› Easy 2B

› iMOTION™

› CIPOS™ IPM

› EasyPACK™

› EconoPACK™

› PrimePACK™

› IHM

› IHV

Infineon p

roducts


Infineon is a key player in the PV market providing

solutions to the leading inverter manufacturers

Global installed PV capacity1

Infineon is present at top-10*

inverter manufacturers (2018)2

2 | Sungrow

3 | SMA

4 | Power Electronics

5 | ABB

6 | Sineng Electric

8 | Ingeteam

9 | KSTAR

10 | TMEIC

1 | Huawei

58.2

109.4

44.8

50.5

103

160

2018 2023e

China

Rest of World

* Infineon is serving the top-10 but not necessarily as a sole supplier.

1) based on or includes content supplied by Informa Tech (former IHS Markit Technology), "PV Installations Tracker – Q1 2019"; March 2019; including off-grid

2) by shipped capacity in MW: based on or includes content supplied by Informa Tech (former IHS Markit Technology), "PV Inverter Market Tracker – Q3 2019“, October 2019

CAGR(18-23): 2%

CAGR(18-23): 13%

CAGR(18-23): 9% [GW]


7 | SolarEdge

Infineon is the leading power semiconductor supplier

for the wind turbine industry

Infineon is present at top-10* wind

turbine manufacturers (2018)2

2 | Goldwind

3 | Siemens Gamesa

4 | GE

5 | Envision

6 | Enercon

7 | Nordex

8 | Mingyang

9 | Sewind

10 | United Power

1 | Vestas

Global installed wind capacity1

29.6

41.3

20.6

26.250.2

67.5

2018 2023e

China

Rest of World

* Infineon is serving the top-10 but not necessarily as a sole supplier.

1) Wood Mackenzie Power & Renewables, "Market Outlook Update”, March 2019

2) by shipped capacity in MW: Wood Mackenzie, Power & Renewables, "Historic wind turbine OEM market share”, March 2019

CAGR(18-23): 5%

CAGR(18-23): 7%

CAGR(18-23): 6% [GW]


Core Adjacent New area

What comes next?

Mid- to long-term structural growth opportunities

new material solar pumps

collaborative robots eAviation

eMarine

fuel cell

eDelivery vehicles

Courtesy:

Siemens AG

Courtesy:

Lilium GmbH

Courtesy: Alstom

Courtesy:

Shakti pumps

EV charging energy storage

Courtesy: McKinsey


› power supplies

› EV on-board charger

› PV inverter

› power tools

› lighting

› Industry 4.0

› Internet of Things

› smartphones

› mobile devices

› wearables

› 5G massive MIMO

› eBikes, eScooter

› multicopter

› aviation

› LSEV

› space

› gaming

› smart home

› data center

› PC, notebook

› peripherals

PMM's growth is built on many applications from

different sectors in power and non-power

CommunicationsConsumer / MiscComputing Industrial

AC-DC (power)

DC-DC (power)

RF and sensors (non-power)


PMM – Power


Infineon is the clear leader in MOSFETs;

growth potential in power ICs

Discrete Power MOSFET market


1.8%

2.2%

3.8%

4.5%

5.9%

7.0%

7.0%

8.0%

13.1%

Microchip

ROHM

Nexperia

A & O

Vishay

Renesas

Toshiba

STMicro

ON Semi

Infineon

Source: Based on or includes content supplied by Informa Tech (former IHS Markit Technology), "Power Semiconductor Market Share Database 2018", September 2019.

Discrete Power MOSFET market incl. automotive MOSFETs. Power IC market incl. automotive power ICs.

Power IC market


15.9%

8.3%

7.3%

7.1%

5.7%

5.1%

4.5%

3.7%

3.2%

3.2%

TI

Infineon

Qualcomm

ADI

STMicro

ON Semi

Dialog

NXP

Maxim

Renesas

(+0.8%-pt)

27.7% (+0.7%-pt)


Technology leadership in MOSFETs and digital

power: highest efficiency and power density

Controller MOSFETDriver IC

triggers low-power

signal to switch ontranslates signal into high-

current gate input switches on,

current flows

Power management solutions reduce TCO

More efficient semiconductors

› lower power consumption

› lower opex

Higher power-density

› more compact system designs

› lower capex

Adjacent Core


In total battery-powered applications are a significant growth driver for PMM's

power business

Four interrelated trends drive power semiconductor

BoM in battery-powered applications

From corded to

cordless power

tools

From brushed DC

to brushless DC

motors

Trend towards higher power

and higher battery voltage

New applications

with trend towards

"batteryfication"

BoM increase:

power semiconductor content

increase up to 4x for DIY tools

Premium products:

~15% higher ASP for

MOSFETs and drivers

significant volume

increase

Interrelated trends for battery-powered applications


Transition from 3G/4G to 5G drives demand in power

semis for antennas and power supplies

5G base station

Massive MIMO

DC-DC (MOSFET, ICs)

Fog Computing

AC-DC, DC-DC (MOSFET, ICs)

Base station power supply


Cloud Computing


5G mmWave antenna


› driver #1: massive growth of data and computing power

› driver #2: higher number of base stations due to denser network

› driver #3: ~4x higher power semiconductor content per radio board:

from ~$25 for MIMO antenna to ~$100 for massive MIMO antenna array

› driver #4: fog computing data center as a completely new market

New!

New!

New!


Core Adjacent New area

What comes next?

Mid- to long-term structural growth opportunities

power tools

home appliances class D audionew material

on-board chargerCourtesy: Nissan

collaborative robots

hyperscale AI data center

5G infrastructure

smart speaker


PMM – RF and Sensing


RF and Sensing devices enable new services and

will shape the way we live and work

Commercial and consumer multicopters

Courtesy: BMW

Augmented Reality Voice-controlled devices Gesture control

Industrial robotics

Various use cases are enabled by a small set of versatile core technologies


We focus on MEMS sensors and target to become

the leader in 3D sensing and radar

Smart Ears, Smart Feeling, Smart Nose

Human Machine Interface

No

distortions

Receive

clear audio

signals

Microphone

World

smallest form

factor

Measure CO2

6x6mm²

Environmental

Best-in-class

resolution

Measure

height

Pressure

Best-in-class

resolution

3D mapping

3D ToF

Highest

energy

efficiency

Biometrics

3D radar

Voice authentication

Face recognition & biometric identification

Key Use Cases – Examples

Smog alarmAdvanced fitness

trackingGesture sensing 3D AR gaming

Smart Eyes &

Sixth Sense


Growing

Smart card form factor

Embedded form factor

Emerging Maturing

Continuous stream of new topics aging and exiting

time

maturity

SIM Card

Authentication

Embedded Secure Element (NFC)

Government IDTPM for Computing

TPM for Automotive

eSIM for Automotive

Contact-based Payment

Transport Ticketing

eSIM for

Industrial

eSIM for

Consumer

TPM for Smart Home

Contactless Payment

Pay TV

TPM for ICT Security

Trust for Industrial

Tokens for Industrial

Trust for Smart Home

Source: Infineon


Infineon OPTIGA™ Trust M to improve the security

and performance of connected devices

› The single-chip solution securely stores unique

device credentials and enables devices to connect

to the cloud up to 10x faster than software-only

alternatives. It is ideal for industry and building

automation, smart homes and consumer

electronics.

› When deploying OPTIGA™ Trust M, critical assets

such as certificates and key pairs used to identify

a device can be injected into the chip at Infineon’s

secured factory premises.

› The turnkey set-up minimizes design, integration

and deployment effort of embedded systems by

providing a cryptographic toolbox, protected I2C

interface and open source code.

New OPTIGA™ Trust M solution helps customers to enhance security of their devices


Agenda




Automotive





1

2

3

4

5

6

7

8


400 359 332 317 311

2,0471,970 1,983 2,015 2,062

39.8% 39.5%

37.8%

36.5%35.5%

Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19

Revenue Segment Result Gross Margin

[EUR m]

Revenue growth despite challenging market

environment

+1% › Revenue up 2% q-q

› Segment Result slightly down

› Underutilization charges burden gross

margin and segment result

› Additional cost containment measures

imposed

› Balancing cycle management while

enabling sustainable growth

+2%

Revenue development


651617

591 598639

181 155 132 145 153

27.825.1

22.3 24.2 23.9

Q4 Q1FY19

Q2 Q3 Q4

361 352 347 357 362

73 69 67 55 59

20.2 19.6 19.315.4 16.3

Q4 Q1FY19

Q2 Q3 Q4

Segment Result Margin in %

163 149 164 167 162

24 16 19 19 22

14.7 10.7 11.6 11.413.6

Q4 Q1FY19

Q2 Q3 Q4

867 846875 888 893

127 117 112 98 78

14.6 13.8 12.8 11.0 8.7

Q4 Q1FY19

Q2 Q3 Q4

[EUR m][EUR m]

Q4 FY19 Division Performance

ATV IPC DSSPMM[EUR m] [EUR m]

› Q4 FY19: Renewables

remain growth drivers (esp.

solar), home appliances and

drives weaker

Revenue Segment Result

+3%

+0%

-2%

-1 %

› Q4 FY19: Revenue

slightly up in payment,

authentication, ticketing

and access control

› Q4 FY19: Seasonal

stronger demand in

mobile devices; DC-DC

power supply improved

› Q4 FY19: Revenue

growth driven by higher

demand for ADAS/AD;

xEV business negatively

impacted by subsidy cuts


0%

10%

20%

30%

FY16 FY17 FY18 FY19 Q1 FY19 Q2 Q3 Q4

Adjusted RoCE (excluding PPA, Deferred Tax Effects, RF power sale, Cypress) RoCE

Adjusted RoCE clearly above WACC

RoCE and adjusted RoCE


2722 22 20

13

2824 24 23

19

Q4 Q1 FY19 Q2 Q3 Q4

EPS basic

EPS adjusted

Earnings-per-share and total cash return

Total cash return to shareholders[EUR m]

173

62 35

26

20

38

109

130

129

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20e

convertible bond buyback share buyback (via put options) dividends

305

212

167 164202

225248

› Policy of sustainable

dividend payout

› Stable dividend: €0.27

› Dividend payment of

€336m on 25 Feb 2020

283

336

2,450

[EUR cent]

308

Development of earnings-per-share (EPS) from continuing operations


Stable opex development

[EUR m]

* In FY19, reported R&D expenses amounted to €945m, net of €111m of grants received and net of €125m of capitalized development costs.

62 61 55 57 63

165 157 157 157159

223236 236

243230

11.1% 11.1%10.7% 10.6%

10.8%10.9%

12.0% 11.9%12.1%

11.2%

Q4 Q1 FY19 Q2 Q3 Q4 Q4 Q1 FY19 Q2 Q3 Q4

General & Administration Selling R&D % of sales

227218

212 214222

Selling, General & Administration Research & Development*


Inventories have peaked in Q3 FY19

Working capital* Inventories

Trade receivables Trade payables

[EUR m]

* For definition please see page "Notes".

[EUR m]

971867 891 848 888

43 40 40 38 39

Q4 Q1 FY19 Q2 Q3 Q4

Trade receivables DSO*

[EUR m]

1,181 1,190 1,1281,079 1,089

66 69 66 61 60

Q4 Q1 FY19 Q2 Q3 Q4

Trade payables DPO*

[EUR m] [days]

712

979

1,452 1,475 1,511

Q4 Q1 FY19 Q2 Q3 Q4

[days]

[days]

1,4801,591 1,706 1,701

108 120 124 124 115

Q4 Q1 FY19 Q2 Q3 Q4

Inventories DIO*

1,758


Cycle management slows down investments

646 693 683 758 858 ~940

114140 129

103

87~60

13.5% 12.8%14.5%

16.5%18.1%

15.4%13.1%

12.9% 11.5% 11.3% 11.8% 11.9%

FY15 FY16 FY17 FY18 FY19 FY20e FY15 FY16 FY17 FY18 FY19 FY20e

Non-SR-related D&A Guidance % of revenue [rhs]

[EUR m]

* For definition please see page "Notes".

785 826

1,022

1,254 ~1.3bn

945

760833 812

861

~1.0bn

1,451

Investments* Depreciation & Amortization


Healthy gross cash and net cash position2

,54

3

2,3

06

1,8

82

3,4

35

3,7

79

22

23

1,5

32

1,5

33

1,5

49

1,5

35

1,5

56

1,0

11

77

3

333 1,9

00

2,2

23

Q4 Q1FY19

Q2 Q3 Q4

Gross Cash Debt Net Cash

[EUR m]

› Q3 FY19: Includes the proceeds of €1.5bn resulting from the capital increase executed on 18 Jun 2019 in

connection with the planned acquisition of Cypress

› Q4 FY19: Free Cash Flow from continuing operations was €334m

(proceeds from €1.2bn dual-tranche hybrid bond booked on 1 Oct 2019)

Liquidity development


Infineon has a balanced maturity profile and an

investment grade rating (BBB)* from S&P

12-year

USPP

Notes

Apr 2028

10-year

USPP

Notes

Apr 2026

8-year

USPP

Notes

Apr 2024

Eurobond

Mar 2022

FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28

$350 $350

$235

€500

Maturity profile

Note: Additional debt with maturities between 2019 and 2023 totaling €32m of which €12m repayments relate to Campeon.

On 1 Oct 2019, Infineon issued a perpetual hybrid bond with two tranches: €600m with first call date in 2025 and €600m with first call date in 2028; both are accounted as equity under IFRS.

* On 3 Jun 2019, S&P placed Infineon on CreditWatch with negative outlook in relation to the Cypress acquisition.

[EUR m; US$ m; nominal values]

€171

Campeon

final re-

payment

Oct 2020


Glossary (1 of 2)

AC alternating current

AC-DC alternating current - direct current

AD automated driving

ADAS advanced driver assistance system

AEB automatic emergency braking

AFS advanced frontlight system

AI artificial intelligence

AR augmented reality

BEV battery electric vehicle

BGA ball grid array

BoM bill of material

CPU central processing unit

DC direct current

DC-DC direct current - direct current

DPM digital power management

eCall emergency call

ECU electronic control unit

EPS electric power steering

eSIM embedded subscriber identity module

eSIM embedded SIM

EV electric vehicle

FPGA field programmable gate array

GPU graphics processing unit

HEV mild and full hybrid electric vehicle

HMI human machine interaction

HSM hardware security module

HST high-speed train

HW hardware

ICE internal combustion engine

IVN in-vehicle networking


Glossary (2 of 2)

IPM intelligent power module

iPol image processing line

IRF International Rectifier

LSEV low-speed electric vehicle

LSPS LS Power Semitech Co. Ltd.

µC microcontroller

MEMS micro electro-mechanical systems

MHA major home appliances

MIMO multiple input, multiple output

micro-

hybrid vehicles using start-stop systems and limited recuperation

mild-

hybrid

vehicles using start-stop systems, recuperation, DC-DC

conversion, e-motor

MOSFET metal-oxide silicon field-effect transistor

OBC on-board charger

OEM original equipment manufacturer

PHEV plug-in hybrid electric vehicle

Pol point-of-load

PV photovoltaic

RF radio frequency

rhs right-hand scale

Si silicon

SiC silicon carbide

SiGe silicon germanium

SMPS switch-mode power supply

SOTA software over-the-air

SW software

ToF time-of-flight

TPM trusted platform module

UPS uninterruptible power supply

V2X vehicle-to-everything communication

VR virtual reality

VSD variable speed drive

xEV all degrees of vehicle electrification (EV, HEV, PHEV)


Disclaimer

Disclaimer

This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group.

These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a

multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected.

Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.

Specific disclaimer for Informa Tech (former IHS Markit Technology) – reports, data and information referenced in this document:

The Informa Tech reports, data and information referenced herein (the "Informa Tech Materials – mostly former IHS Markit Technology Materials") are the

copyrighted property of Informa Tech Research Ltd. and its subsidiaries ("Informa Tech") and represent data, research, opinions or viewpoints published

by Informa Tech, and are not representations of fact. The Informa Tech Materials speak as of the original publication date thereof and not as of the date of

this document. The information and opinions expressed in the Informa Tech Materials are subject to change without notice and neither Informa Tech nor,

as a consequence, Infineon have any duty or responsibility to update the Informa Tech Materials or this publication as a result. Informa Tech Materials are

delivered on an "as-is" and "as-available" basis. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or

correctness of the information, opinions and conclusions contained in the Informa Tech Materials. To the maximum extent permitted by law, Informa Tech

and its affiliates, IHS Markit and its Affiliates and their respective, officers, directors, employees and agents, disclaim any liability (including, without

limitation, any liability arising from fault or negligence) as to the accuracy or completeness or use of the Informa Tech Materials. Informa Tech and/or IHS

Markit will not, under any circumstance whatsoever, be liable for any trading, investment, commercial or other decisions based on or made in reliance of

the Informa Tech Materials. The "IHS Markit" brand and logo have been licensed for use by Informa Tech. The "IHS Markit" brand and logo and any third-

party trademarks used in the IHS Markit Technology Materials are the sole property of IHS Markit Group or their respective third-party owners.

Specific disclaimer for IHS Markit – reports, data and information referenced in this document:

The IHS Markit reports, data and information referenced herein (the "IHS Markit Materials") are the copyrighted property of IHS Markit Ltd. and its

subsidiaries ("IHS Markit") and represent data, research, opinions or viewpoints published by IHS Markit, and are not representations of fact. The IHS

Markit Materials speak as of the original publication date thereof and not as of the date of this document. The information and opinions expressed in the

IHS Markit Materials are subject to change without notice and neither IHS Markit nor, as a consequence, Infineon have any duty or responsibility to update

the IHS Markit Materials or this publication. Moreover, while the IHS Markit Materials reproduced herein are from sources considered reliable, the accuracy

and completeness thereof are not warranted, nor are the opinions and analyses which are based upon it. IHS Markit and the trademarks used in the Data,

if any, are trademarks of IHS Markit. Other trademarks appearing in the IHS Markit Materials are the property of IHS Markit or their respective owners.


Financial calendar

Date Location Event

13 – 14 Nov 2019 Barcelona Morgan Stanley TMT Conference

20 Nov 2019 Frankfurt DZ Bank Equity Conference

25 Nov 2019 Munich UBS German Senior Investor Day

5 Feb 2020* Q1 FY20 Results

20 Feb 2020 Munich Annual General Meeting

24 – 26 Feb 2020 Barcelona Investor Meetings at Mobile World Congress

5 May 2020* Q2 FY20 Results

6 May 2020 Nuremberg Industrial Power Control Business Update at PCIM

9 – 10 Jun 2020 Paris Exane 22nd European CEO Conference

4 Aug 2020* Q3 FY20 Results

9 Nov 2020* Q4 FY20 and FY 2020 Results

* preliminary


Notes

Investments = 'Purchase of property, plant and equipment' + 'Purchase of intangible assets and other assets' incl. capitalization of

R&D expenses

Capital Employed = 'Total assets' – 'Cash and cash equivalents' – 'Financial investments' – 'Assets classified as held for sale

– ('Total Current liabilities' – 'Short-term debt and current maturities of long-term debt' – 'Liabilities classified as held

for sale')

RoCE = NOPAT / Capital Employed

= ('Income from continuing operations' – 'financial income' – 'financial expense') / Capital Employed

Working Capital = ('Total current assets' – 'Cash and cash equivalents' – 'Financial investment' – 'Assets classified as held for sale') –

('Total current liabilities' – 'Short term debt and current maturities of long-term debt' – 'Liabilities classified as held for

sale')

DIO (days inventory outstanding; quarter-to-date) = ('Net Inventories' / 'Cost of goods sold') * 90

DPO (days payables outstanding; quarter-to-date) = ('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and

equipment']) * 90

DSO (days sales outstanding; quarter-to-date) = ('Trade receivables' / 'revenue') * 90

Please note: All positions in ' ' refer to the respective accounting position and therefore should be applied with the positive or negative sign used in the

relevant accounting table.


Institutional Investor Relations contacts

Alexander Foltin

Corporate Vice President

Finance, Treasury & Investor Relations

+49 89 234-23766

[email protected]

Isabell Diel

Manager Investor Relations

+49 89 234-38297

[email protected]

Holger Schmidt

Senior Manager Investor Relations

+49 89 234-22332

[email protected]

Joachim Binder

Senior Director Investor Relations

+49 89 234-25649

[email protected]

Alexander Groschke

Senior Manager Investor Relations

+49 89 234-38348

[email protected]


Fourth Quarter FY 2019 Quarterly Update

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